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Last Update: Wednesday June 23, 2021

Key Idea: Invest Sweat and All Your Cash

Gary Walls invested all of his own cash and all of his time to get his company off the ground.

Key Question:


Yes.  Always.  Investors, bankers and even friends and family won't invest in an idea that you aren't willing to put you own money into.  Gary put his cash in at the beginning and he kept putting his cash in.  He basically started and grew the business with with retained earnings.

Q: What are retained earnings?

If you take in $1,000 and is costs $600 to make your product, then your retained earnings are $400. Keep in mind that most small business owners don't pay themselves until they see the size of their retained earnings. In other words, their own salary is not calculated into the cost of running the business. They pay their suppliers and employees, but often don't pay themselves. If a small business owner does take, as in this example, the $400 for his own salary, then the company has zero retained earnings. If you are like Gary and don't have a banker to loan you startup capital, then you have to use the retained earnings to grow.

Note: Gary has a new building and new equipment today because of an SBA-backed loan. After 12 years of steady leadership, bankers are happy to make Gary a loan.

Q: Why did Gary say that no one believes you can grow a business with retained earnings?

A: Because this takes enormous discipline and sacrifice on the part of the owner. Laurie Snyder, founder of Flap Happy, took no income from the business for four years. By not taking income, owners use the dollars to develop a new product, hire an employee with a skill the company needs, buy a building or a new piece of equipment. Even though it is difficult to grow without borrowing money, many small business owners do it and succeed as Gary has. 

Think about it

How have you financed the startup and growth of your business?  Should you look for investors?  Is your banker helpful?

Clip from: Trailblazer Foods

Portland, Oregon: Employing over 60 people, in this episode we take you from the source -- beautiful berry fields throughout Oregon -- to the finished product. For his success in building a business and for championing the export of Oregon's wonderful fruit, The Small Business Administration named Gary Small Business Person of the Year for Oregon.

Sometimes our show becomes a tribute to a life well lived. When we taped this show, Gary had physical limitations. He paced himself. But in August 2001, Gary died and left this wonderful legacy to his immediate family, his family of employees, his family of customers and suppliers, and his largest family, the world. Surely you will see why by tasting value, you also have an after-taste that profits many. For Gary Walls, it is a taste that is tangibly intangible. It may first be in the taste of the berry; it is also in a taste for life's greatest blessings.

Trailblazer Foods

Gary Walls, Founder

17900 NE San Rafael
Portland, OR 97230
503 666 5800

Visit our web site:

Office: 503 666 5800

Business Classification:

Year Founded: 1985

Invest Sweat and All Your Cash

HATTIE: OK, but wasn't the start-up a little sticky in regard to money? I mean, wasn't it a little--there's no money at the beginning.

GARY: No, it just meant that my wife and I, Joyce--we rented Ryder trucks and delivered stuff to Cosco in rental vans. We had to deliver ourselves. We had to do lots of times with shoestrings that we tied together to make it work, and we just grew with the business; and it can work if that's your plan.

HATTIE: So you started strictly with your own savings or something?

GARY: All our own savings. I think our only capital into this was $1,000. And the rest, it was from earnings that we had. I've always been told that earnings is not a way you can build a business. For me, it was the only way. I mean, there was no banking at that time; there was no opportunity for funding, and so earnings was all we had. It's all I knew.

HATTIE: The retained earning is all you had.

GARY: All we had to work with.

HATTIE: So what was the first recipe you stirred up?

GARY: Well, the first thing I did, I was--Mr. Elmer, Walt Elmer, he was a wonderful man. He owned a chain of some breakfast restaurants, and we had our coaches' meetings there. And one day, he asked me, `Gary, would you like to come and supervise kids at nights cleaning?' And I said, `Yes, I would.' So while they were cleaning and I was supervising it for a little extra money, I went in the kitchen and I made some Marionberry syrup, the very first thing I made, because I noticed he had purchased some syrup from another company, from another state, that wasn't Marionberry, and I thought, maybe I can make something like that. So I made this sample. And Mr. Elmer was so particular; I knew that--I made one sample, and I poured it in three different jars so when he tasted, I knew he wouldn't like just one. So I made one sample in the three different jars. And the next morning when he sampled it, he didn't like the first one, too sweet; didn't like the second one, it was too tart; but he liked the third one, which was all the same recipe. And so he said, `I want to serve this with my pancakes.' And so there was an application to the use of the Marionberry syrup. So that's the first thing I did.

HATTIE: So wait a minute, let's stop here. Your very first thing you stirred up, you had a businessman who was in a position to use it, get it into the marketplace instantly, tell you, `I like this.'

GARY: It was, you know, gratification immediately. He says, `I like it.' And I knew when he said, `I like it,' he meant it.

HATTIE: So you got a feedback instantly that you had a good idea, and that's probably what gave you the confidence to say, `I can do a business.' Do you see what I'm saying?

GARY: It was a confidence in that, and it was also a confidence that--`If you like my Marionberry syrup, you're gonna love my strawberry compote.'

HATTIE: Because you've already made that a lot.

GARY: So I made--the next day I said, `For your Belgian waffles, how about fresh strawberry compote with real strawberry juice?' So that's the next thing I made, and he liked that. And I just kind of looked for places where I could make something that he could use.

HATTIE: All right, so was he your first big customer?

GARY: My very, very first customer.

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